Making the Right Choice Based on Your Company’s Goals
The decision to buy or lease equipment depends on several strategic factors. For a growing company, it may be more advantageous to invest in growth projects rather than tying up cash in assets. Conversely, some companies may prefer to buy in order to capitalize on their long-term investments.
APARE Services assists companies in this reflection and helps them choose the best financing solution according to their goals and financial situation.
The Importance of Accountants in Decision-Making
Accountants play a crucial role in analyzing the financial and tax implications of financing options. It is therefore essential to surround yourself with experienced advisors to make informed decisions.
Recommendations vary depending on the company’s strategy and the manager’s goals. However, many business owners do not always have a clear vision when it comes to defining their investment priorities.
APARE Services collaborates with accountants and financial advisors to help companies structure their financing based on their real needs. This approach maximizes the profitability of investments while ensuring effective cash flow management.
Advantages and Disadvantages of Financing Options
| Option | Advantages | Disadvantages |
|---|---|---|
| Commercial Loan | – The company owns the asset from day one. | – More money needed upfront, taxes paid immediately. |
| – Generally flexible loan contract (early repayment, rate negotiation). | – Owner responsible for maintenance and repair costs. | |
| – Sometimes easier to resell the asset if necessary. | – Requires a down payment, immobilizing liquidity. | |
| – Loan may last longer than the financed asset. | ||
| Lease | – Generally quicker to obtain. | – Lack of contract flexibility (early repayment or lump sum payments not possible). |
| – Monthly payment facilitates cash flow management. | – Not all suppliers offer a leasing option. | |
| – No maintenance and repair costs. | – Rates are generally fixed once established. | |
| – Allows more money allocation to growth activities. | – Equipment does not belong to the buyer until the lease is paid off. | |
| – Taxes are not paid upfront. | ||
| – Easy to replace if equipment has a short lifespan or requires regular updates. | ||
| – No down payment required. | ||
| Cash Payment | – No interest to pay. | – Immediate purchase requires significant capital investment. |
| – Immediate ownership of the equipment. | – Tying up funds in asset purchase can limit other growth opportunities. |
This table highlights the major differences between these solutions. Each company must evaluate these elements based on its strategy, financial capacity, and development goals.
Making the Right Choice for Your Business
The financing method for new equipment depends on several factors, including the company’s development phase, financial health, and strategic goals. These elements evolve over time and require regular reassessment.
It is therefore essential to maintain an ongoing dialogue with a financial advisor or professional financing broker. When an expert understands the vision and specific needs of a company, they can propose tailored financing solutions that foster growth while ensuring optimal cash flow management.
APARE Services supports companies in this process by providing personalized advice and structuring their financing according to their current and future needs.
Final Word
Surrounding yourself with competent people is a key success factor in business. Many successful entrepreneurs in Quebec and Canada have built their success by relying on experts who can guide them in their strategic decisions.
APARE Services puts its expertise at the service of Quebec companies to help them structure their investments and choose the most advantageous financing solution for their growth.
Whether you opt for a commercial loan, a lease, or another business financing solution, our experts are here to advise and assist you.
A Word from Our Lawyers
This article is intended to provide general information only and is not intended to provide immediate legal, financial, or other professional advice. Please consult us regarding your particular situation. The information presented is deemed factual and up-to-date, but we do not guarantee its accuracy and it should not be considered a comprehensive analysis of the topics discussed. Opinions expressed may change.